Number of registered funds up in Cayman, insurance market solid

Although the hedge fund industry faced one its most difficult years since the financial crisis, the number of funds licensed by the Cayman Islands Monetary Authority grew by 4.1 percent in 2018.

The total number of funds at the end of the year was just short of the 11,000 mark.

According to eVestment’s Hedge Fund Asset Flow Report, investors globally removed $19.64 billion from the industry in December, bringing total investor redemptions to $35.3 billion in 2018, the second highest investor redemptions since 2009.

Coupled with performance-related asset declines of $52.4 billion during the year, total industry assets dropped by $87.7 billion.

The number of Cayman-registered funds, however, jumped from 10,559 in 2017 to 10,992 last year.

At the end of 2018, there were 130 more master funds and 323 more registered funds compared with 12 months earlier. Only the number of administered and licensed funds declined by 14 and six, respectively, during that time period.

Despite a soft insurance market, Cayman’s captive insurance industry saw a “robust” number of new formations with 33 new licenses issued in 2018. This brought the total number of insurance companies to 730.

Class B, C and D licensees totaled 703 – up from 696 in 2017. About 21 percent of insurance companies in these groups were formed as segregated portfolio companies. Pure captives and group captives represented the two main categories.

“These Q4 results are promising, and we look forward to further growth this year,” said Erin Brosnihan, chair of the Insurance Managers Association of Cayman. “We also note that the 2018 figures did not include Portfolio Insurance Companies, which would only further increase the numbers.”

The number of portfolio insurance companies increased from 10 to 19 last year. Portfolio Insurance Companies are regulated by CIMA, but do not need to be separately licensed as an insurance company.

The total value of premiums at the end of 2018 increased to US$15.4 billion from US$12.4 billion a year earlier, and total assets in the sector grew from US$61 billion to $68.7 billion.

Meanwhile, company statistics are set for another record-breaking year after the total number of companies registered in Cayman reached 106,291 in the third quarter of 2018.

The Cayman Islands Company Registry saw 15,494 new companies, more than at any time since the financial crisis, and 6,894 terminations through November 2018. This compares with 13,046 new registrations and 10,203 terminations for the full year in 2017.